Edison Investment Research Limited
London, UK, 23 January 2023
Creo Medical (CREO): Progressing on all fronts
2022 was an eventful year for Creo Medical, as it progressed on all fronts of its ‘Build, Buy and Partner’ strategy. The period was marked by the increasing traction of Speedboat Inject (its flagship electrosurgical device) and its proprietary CROMA technology platform. Enhanced levels of user, robotics deals with Intuitive and CMR, and multiple heads of terms agreements all suggest a potential inflection point for Creo. To factor in these developments and the improved visibility of the company’s near-term plans, we have revisited our model assumptions and introduced more granularity to our estimates. We now categorise Creo’s revenue stream from three sources: Core technology, Consumables and Partnerships, resulting in our valuation rising to £493m or 272p/share, from £489m (269p/share) previously. We note that at current burn rates, Creo would need to raise funds by Q223 to continue supporting its development plans.
Our valuation is virtually unchanged at £493m or 272p/share after incorporating changes in our forecasts, including inclusion of ex-Europe consumables sales and the expected contribution from the Intuitive deal, partially offset by a more protracted ramp-up of the Speedboat Inject user base we now assume. We estimate the need to raise a total of £25m before turning EBITDA-positive in H225 and achieving net profitability in H126 (previously £30m and FY25, respectively).
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